Computer Task Group (CTG) Downgraded From Buy to Hold

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NEW YORK (TheStreet) -- Computer Task Group  (CTG) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+.  TheStreet Ratings Team has this to say about their recommendation:

"We rate COMPUTER TASK GROUP INC (CTG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

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Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CTG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CTG has a quick ratio of 2.44, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.3%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the IT Services industry. The net income has decreased by 20.3% when compared to the same quarter one year ago, dropping from $4.06 million to $3.23 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the IT Services industry and the overall market, COMPUTER TASK GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: CTG Ratings Report

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